dave ramsey will be here. >> brian: the other two guys don't sing. >> steve: yeah. but maybe they will. also we'll talk about the penguin and that bird, what is it? find out in the after the show show. see you tomorrow. bill: good morning on a tuesday. we'll start with a fox news alert. there is a significant development minutes away in the phone-hacking investigation in england. the parliamentary committee is set to question top executives including rupert murdoch. jamie: "news of the world" is under the microscope today accused of hacking into private cell phone accounts and bribing police for information.

bill: the police out of scotland yard have been in the crosshairs. amy kellogg is live in london beginning our coverage there. >> reporter: when the murdochs testify they are obliged to answer questions quote by their honor. a lot of people are saying because this meeting before a parliamentary committee and judge-led and police-led inquiries, the panel must prove this is not just a piece of political theater. there has been immense media interest. cameras were out as james murdoch left his home to go to news international offices and snappers chased rupert murdoch as he left his home.

they will answer questions for an hour. and that's starting in half-hour. then rebekah brooks who used to run murdoch's british newspaper empire until last week will answer questions. a limited number of the public are being allowed in. people were lined up at 7:00 a.m. and the line stretched around the block trying to get a seat. the police are still also under allegation of corruption. this story has so many 10 kals, many threads of inquiry even as it involves police involvement. a news of the word reporter was

found dead in his home yesterday. sean was the man who originally blew the whistle on his knowledge -- his allegation that former editor of the world andy coulson was very aware of phone hacking and encouraged it. that allegation is something coulson has denied. bill there are when the testimony from mr. murdoch and his son james get underway we'll take you to that room in london, england. jamie: we are just getting word that the fbi is searching homes of the suspected hacker group anonymous. the target said to be in their late teens to early 20s. we are told the hacking group

inspired by wikileaks has defaced web sites, shut down servers and scrawled messages across screens. police say they are responsible for a number of digital breakins, including visa, master card and sony. bill: this is about as big as it gets, awaiting a critical vote on that $14 trillion debt. house republicans will go ahead today and vote on the cut cap and balance plan. democrats have railed against the tea party backed proposal. it would cut $111 billion by 2012. gradually cap government spending, and one of the biggest points of discuss, it add a constitutional amendment requiring a balanced federal budget. that would have to pass before raising the nation's debt ceiling an additional $2

trillion. we'll talk to chris van hollen. he says he's against that plan. we'll find out what he's for, minutes away. jamie: severe weather gripping parts of the country. one storm system dumping 15 inches of rain flooding streets and highways and a few buildings near new orleans. >> in 20 years i have lived here this is the worst on this side of the street. >> we can only drain one inch at a time and if you do the math we can't keep up with it. jamie: the mississippi valley and the midwest say 15 deaths in the past week can be blamed on heat. temperatures expected to hit triple digits in some areas. folks doing anything and everything they can to try to stay cool. >> i had to go get my

granddaughter. >> i was drinking a lot of fluids. just don't do too much moving around. >> we are staying in the house under the air and that's it. jamie: the often-like temperatures expected to spread east very soon. steve brown live in chicago. how hot is it? >> reporter: it sounds like a joke, but up in minnesota on a piece of interstate 94 westbound a portion of the road buckles. when the heat makes things expand and forces these plates on the road to separate. in the city of chicago they are bracing for what looks like a sizzling week. not just the high temperatures. but meteorologists say there is

a dangerous mix of conditions. >> it's not only the temperature that's the problem it many the temperature, the humidity and the fact that the wind is light. you mix all that in together and we are seeing temperatures that feel like 115-120. whenever you get it that high it's dangerous to be outdoors. >> reporter: overnight low in chicago 79 degrees. it's going to be like that with low temperatures in the low as it. high temperatures upper into the 90s. jamie: steve brown live in chicago. thank you. bill: there is new video from the sailboat race we talked about yesterday in michigan. the news broke after a severe thunderstorm causes wind gusts to capsize a boat with 8 people onboard. witnesses say waves reached 6

feet high. at midnight it was pitch black out there at the time. dozens of other sailboats stopped to help. 6 members of the crew were pulled from the water. but the scirp and one of the crew members died from head trauma when the boat turned over. that's a well-known race we watch in lake michigan. jamie: those are a few of the many stories we are following this morning in america newsroom. senator tom coburn upping the ante. he has a deal to cut $9 trillion. bill: a man's son dies from injuries after falling down the stairs. very strange discoveries in this case. jamie: the arm robbers will have

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bill: republican senator tom coburn is proposing $9 trillion in spending cuts. >> this plan offers the american people 9 trillion reasons to stop making ex cues and start solving the problems in washington. i have no doubt both parties will criticize portions of this plan and i welcome that debate. but it's not a legitimate criticism until you have a plan of your own that solves the problems of the future, that secures prosperity for our kids

and grandkids. what is not acceptable is not having a plan and delaying one until some perfect political moment that will never arrive. bill: the house republicans will move ahead on this vote to cut cap and balance today. chris van hollen is back with us. good morning to you. tom coburn is coming out with guns blazing. $9 trillion to save america. he says it's rough but it's necessary. do you agree? >> we have to couple with a plan to reduce the deficit. we need to do it in a balanced way. i give senator coburn credit for putting the plan on the table. this plan recognizes spending through tax breaks is like spending through other parts of the government. and he would allow for cutting special interest tax breaks for the purpose of deficit

reduction. i have not had an opportunity to look as the his entire plan. it calls for draconian cuts. butch he provides a combination of cuts and elimination of the tax loopholes for the purpose of deficit reduction. bill: just fact that he couples with taken idea for $9 trillion it gives you a sense of the enormity of the issue. democrats control the senate, you have got a democratic president. can you afford to allow this debt issue to linger into another election cycle as a party? >> we all need to come together to make sure the united states pays its bills. obligations we already incurred. democrats and republicans alike have voted for. failure to do that will send the economy into a tail spin. that's not just me or secretary geithner. that's non-partisan economists. we need a robust deficit

reduction plan. the president putt on the table a proposal to cut $9 trillion. and he demonstrated you can couple with at least a trillion in revenue by closing a lot of these loopholes. bill there is an idea in the house that's been moved forward on behalf of republicans that calls for a balanced budget amendment among many other things. viewers write this. bya, because you asked. this is out of the university of missouri. this is a student who writes. will all the bickering over the debt debate limit happen next time we have to raise it any way? that's the argument for a balanced budget amendment. we are back in the same hole a year from now or two year from now or five years from now. why do you support that?

>> i encourage everybody to read this bill. this is not your garden variety balanced budget amendment. it has rules to impose the republican budget plan. two device it uses. it says if you want to cut medicare or social security a simple majority vote in the congress. you want to close a loophole for deficit reduction you need a 2/3 vote. second they artificially cap expenditures at a level that the level has exceeded every year since 1966. bill: because they believe the spending is out of control. here is something i don't nuns the argument you are making. they are going the allow washington to spend $2.5 trillion more over the coming two years. now, how in the world does that equate to the cut you describe for medicare and medicaid and

social security. they are giving you $2.5 trillion more to spend. >> we are talking about paying for past obligations that are already in the pipeline. i agree we need to balance the budget. there are different ways to do it. what they would do is write into the constitution procedures that tie the hands of congress and say you have to reduce the budget deficit their way. they say it's easier to cut medicare. they would write that in the constitution and put this artificial cap in place that would prohibit the dprong working its will if it wanted to balance the budget at 19% or 20%. bill: 70% of the people we polled say they favor a balanced budget amendment. >> actually that fact has been miscited. only 12 states --

bill: 70% of support for a balanced budget amendment. we are going to watch the vote today. >> that's a normal balanced budget amendment, not a warped one. jamie: we are after he waiting testimony from news corporation chairman rupert murdoch and his on james in the hacking scandal rocking the u.k. bill: a teenager accused of killing his own parents. then it gets worse. >> it was a merciless killing. it was brutal, and then the facebook invitation, a party to have your friend and 40-60 people come over i think speaks for itself.

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jamie: we are awaiting testimony in the news corporation hacking scandal. chief executive and his son jim. >> reporter: it's a scandal that rocked one of the globe's biggest media companies and cast a harsh spotlight on one of the biggest media families. they will answer questions about what went wrong, how they addressed it and effort to insure the alleged phone hacking doesn't happen again. it started in 2005 with prince william's knee injury. the paper's report are and private investigator were arrested.

but the practice may have extended beyond that story. in 2002, a bring stish school girl disappeared and was murdered. july 4, 2011, allegation emerged her voicemail may have been hacked and messages deleted to free space in her mailbox leading her family to falsely believe she was still alive. rupert murdoch promised full cooperation with the police and he shut down the news of the world *. then andy coulson was arrested. and allegations surfaced former prime minister gordon brown had also been targeted. the controversy caused news corp to drop its bid for b sky b. phones of 9/11 victims were

hacked. last friday rebecca brook the ceo resigned. this the wall street publisher are stepped down. on that same day murdoch met with millie's family to personally apologize. saturday murdoch placed fill-page newspaper ads saying "we are sorry." brooks was arrested and questioned by police. and yesterday the man who went public with the allegation, the news of the world's former business reporter sean hoare was found dead in his home. he claims a number of phones were hacked for exclusive stories. >> reporter: also scheduled to appear will be rebecca brook during a parliament session in 2003 she said news international

paid police for information for stories. jamie: eric, thanks so much. bill: there is a committee hearing looking at the role of police already underway. we await mr. murdoch and his son james. when there are developments you will hear all about them. incredible video of a massive dust storm. a wall of dust invading an entire city. we'll be right back. 7 we all have internal plumbing.

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bill: there is a hearing about to get underway in that phone hacking investigation. there were two hearings that will at some point run simultaneously to one another in separate rooms. we are awaiting testimony from the top news corp executives including the chairman and chief executive rupert murdoch. his 38-year-old son james murdoch. that hacking scandal involves the parent company of the fox news channel. what you are watching is taken inquiry into the police and its role into this hacking scandal. in the past through days two of the top leading police officers of scotland yard have resigned. they left their jobs and moments ago one of the departing

officers says in hindsight he would have reopened the hacking inquiry. this goes back a couple years. just to bring you up to date it was a scandal that erupted back in 2005, five or six years ago that seemed to go over at times in a way where the company took care of the issue and the police were satisfied with the outcome. and now this erupted about 10 days ago when news corporation was on the verge of purchasing a lucrative satellite network called bring stish sky broadcasting, b sky b, about 24 hours away from aparole when the hacking scandal explode anew in london. this has been all the talk of london, in the u.k., and it's taken our chairman rupert murdoch to london the past couple weeks. he's set to take questions from this parliamentary committee, a

committee that will have 10 members on it and james murdoch will possibly take questions at that point. following that, a woman by if the name of rebekah brooks who also resigned her position. a leading executive of the news corporation resigning her job friday. she'll then take questions. she was the editor in charge of the newspaper called news of the world that has now been put out of business after running its operations in london for 168 years. so we are waiting on rupert murdoch and his son james. when that begins we'll take you live to london and pick up our sister coverage with sky news. about 9:31 here in new york. take a look at the markets. look at that. look what can happen in 90

seconds. up about 96 points. 97 for the dow. investors reacting to debt fears. the dow fell 95 points yesterday. we'll keep an eye on the movement of the markets today. a lot of this is tied into and the battle -- tide into washington and the battle over the debt. jamie: some earnings out today, people are earning somewhat. meanwhile commuter rail service is likely to resume in minnesota after a massive freight train derailed. it shut down the tracks. 17 cars and two locomotives jumping the tracks, damaging a bridge and spilling corn and fuel into the water below. officials are blaming heavy rain for washing out the track's foundation as the backlog of the freight train thins out.

bill: dramatic images of a dust storm in phoenix, arizona. we watched this about a week ago. that wall 3,000 feet high. national weather service issued a warning yesterday afternoon. they suave sit coming, saying the dust cloud was packing winds of 30-mile-an-hour. >> we were driving, it came so fast. we were stand outside the house. it was so cool and beautiful. >> insane, it was crazy. i was watching out my backyard. just a big wall of dust. i couldn't do nothing. bill: it was awesome, she says. that storm coming two weeks after another storm brought a mile-high dust cloud through the grand canyon state knock out power for hundreds of people

throughout phoenix. jamie: the space shuttle departing the international space station for the last time. the shuttle's commander saying i'll never forget the role the space shuttle played in the space station's creation. helping to build and supply the crew. now atlantis sets its sights on the final trip home. bill: we'll talk with the astronauts tomorrow in mire today's newsroom. we hear about an air traffic controller being drunk on the job. it happened at a colorado facility that controls aircraft flying over portions of 9 different states. he was tested for drugs and alcohol six hours into an eight-hour shift. he has twice the level allowed for controllers on the job.

the veteran controller was immediately relieved of duty and is apparently in rehab. jamie: a fox news alert. we are watching the room where our chairman rupert murdoch will be testifying. let's take a look and listen and hear as this gets underway. >> our understanding was we would be afforded the opportunity to make an opening statement. we prepared on that basis and we would like the opportunity to make that statement. would you allow us? >> the committee discussed that earlier. we hope what you wish to say will come out during the course of questioning. if you feel that is not the case, then you can make a statement at the end.

>> in that case we would like to submit the statement in writing. >> that would be perfectly acceptable. >> after that brief interruption we'll begin. good afternoon. this is a special meeting of the select committee.

this is a continuation of what the committee held in 2009 on the evidence of phone hacking. in our report we stated that we thought it was inconceivable that only one reporter has been involved. in the last few weeks it has emerged that not only evidence has come out which i think vinlds kateed this conclusion but also abuses have been revealed which shocked our country. it's also clear the parliament has been mislead. we are caution with the ongoing police investigation and possible criminal procedures and this committee would not wish to jeopardize that. however, we are encouraged by the statement made by all the witnesses this afternoon that they wish to cooperate with the exit ian help us establish the truth. so our first witness his afternoon can i welcome the

chairman and chief executive of news corp, rupert murdoch and james murdoch. i also thank you for make yourselves available to the committee this afternoon. perhaps i might start with mr. james murdoch. you made a statement on the 7th of july in which you stated that the paper had made statements to parliament without being in full possession of the facts and that was wrong. you've sensely admitted parliament had been mislead in what we had been told. can you tell us to what extent we had been mislead and when you became aware of that. >> i would like to say as well just how sorry i am and how sorry we are to particularly the victims of illegal voicemail interception and their families it's a matter of great regrefort mine, my father's and everyone

as the news corporation. and these are standards -- these actions do to the live up to the standards that our company aspires to as we are around the world. it's our determination to put things right, make sure these things don't happen again and to be the company that i know we have always aspired to be. as for my comments and my statement which i believe was around the closure of the news of the world * newspaper -- the statement around the closure of the "news of the world" newspaper where i stated that we the company had not been in full possession of the facts when certain statements were made to this committee was referring to the emergence of new facts, largely that came about at the end of 2010 as the

due process of a number of civil trials reached their points where document disclosure and evidence disclosure made it apparent to the company and to myself at that time that indeed there were -- there was reason to believe that potentially more people had been involved in "news of the world" illegal voicemail interception that postdated the 2009 hearing. that's what i was referring to. subsequent to our discovery of that information in one of the civil trials at the end of 2010 which i believe was the miller case. the company immediately went to look at additional records around the individual involved. we alerted the company alerted the police who we started on

that basis the investigation that is now underway. and since then the company has admitted liability to victims of illegal voicemail interception, has apologized unreservedly. which i apologize to those victims and the company set up a compensation scheme managed by a high-court judge to deal with legitimate claims coming from victims of those terrible incidents of voicemail interceptions. those are the actions that were taken as soon as the new evidence emerged. so when i made the statement about not being in full possession of the facts, it was those facts at that point were still in the future and it was in the due process of that civil litigation process that that evidence really emerged and the company acted as swiftly and transparently as possible.

>> when this committee took evidence in 2009 we heard from the managing editor, the legal manager and news world editor. the former editor, an former chairman. all of them told us there had been a thorough investigation. no evidence had been found anybody else was involved. that clearly is not correct. were any of them lying to this committee? >> mr. chairman, the company relied on three things throughout -- for a period of time. up until the new evidence emerged. the company relied on a police investigation in 2011 and this is before -- to try to take us back to this area -- this was before i was involved.

i became involved in news corporation in international matters the end of 2011. in the 2011 period there was a police investigation, successful prosecutions were brought against two individuals, and the editor of the news of the world resigned. the. the police closed the investigation and repeated he versions there was no evidence to reopen their investigation. the company relied on there was nothing for to this at the time and relied on the legal opinion of outside counsel related to those matters. with respect to their review issued a clear opinion. there was no illegality of the two individuals involved before. the company relied on those. for the company in 2008 and 2009

it was not clear there was a reason to believe that those matters were anything other than settled matters in the past. >> so your testimony to this committee is none of them knew what was going on? >> i do not have direct knowledge of what necessity knew and what time. but i can tell you that the critical new facts as i saw them and as the dmoim saw them emerged in the production of documentary information or evidence in the civil trials at the end of 2010. and the duration from 2008 -- 2007 to the send of 2010 and the lengths of time it took for that evidence to be there is a matter of deep frustration. i have to tell you i know and

sympathize with the frustration of this committee and it's matter of regret that the facts could not emerge and could not be gotten to to my understanding faster. >> you made clear that this is the case, the information we were given was incorrect. you established goodman was involved in phone hack as well. >> could you repeat that. >> who as well as goodman were involved in phone hacking in news of the world. >> i think you made it clear earlier there will be have been a number of arrests of former "muse oformer"news of the world. it's difficult to comments particularly around some of those individuals. >> have you carried out your own investigation since the

discovery of this information to find out the extent of involvement in phone hacking in "news of the world"? >> we established a group in the company cooperating very closely with the police on their investigation. their investigation is broad with respect to journalistic practices and the policy and direction the company has given them toys cooperate fully -- them is to cooperate fully and transparently with what the company believes is relevant to those investigations. sometimes proactively, sometimes in response to those requests. the fact that the provision of the new information to the police in the first place when there was no police investigation ongoing led to in part the reopening of or this new investigation being established.

i hope it can be testament to some proactive action and transparency with respect to getting to the right place in terms of find out the facts of what happened, understanding all of the allegations that are coming in, and moving forward to aid the police in successful completion of the important and serious work they are doing. >> the departure from your company of brooks and hinson, is that because any of them have knowledge of phone hacking? >> i have no knowledge. there is no evidence that i'm tea ware of that miss brooks or mr. hinson or nip of those executives had knowledge. and there are assertions miss

brooks and assertions to me they are knowledge of those things has been clear. those resignations have been accepted. but it's important on the basis there is no evidence today that i have seen or that i have any knowledge of that there was any impropriety by them. >> tom watson. >> good afternoon. you repeated the statement that news corp has a zero tolerance to wrongdoing by employees, is that right? >> yes. >> in october 2010 did you believe it to be true when you made your speech and said let me be clear we'll vigorously pursue this and we'll not tolerate wrongdoing. >> yes. >> if you were not lying then, somebody lied to you. who was it? >> i don't know. that's what the police are

investigating and we are helping them. >> you acknowledge you were mislead. >> really. >> let many take you back to 2003. are you aware in march of that year rebekah brooks gave evidence to this committee admitting paying police? >> i'm now aware of that. i was not aware at the time. i'm also aware that she amended that considerably quickly afterwards. >> i believe she amended it 7 or 8 years afterwards. >> did you or your organization investigate it at the time? >> no. >> can you explain why? >> i'm sorry -- i have -- this is not an excuse, maybe it's an explanation. news of the world is less than

1% of our company. i employ 53,000 people around the world. we have a great and ethical distinguished people, professionals. and and i'm spread watching and appointing people in my trust to run those divisions. >> i do accept that you have many distinguished people that work for your company. you are ultimately responsible for the corporate government of news corp. what i'm trying to establish is who knew about wrongdoing. if i can take you forward to 2006, when clyde goodman was arrested and convicted of intercepting voicemails, were you made aware of that? >> i was made aware when he was

convicted. >> subsequent to the arrest of goodman did you get to the facts? >> we worked with the police on further investigation and eventually we appointed a very leading team of lawyers in this city to investigate it further. >> let me finish my line of questioning. what did you personally do to investigate after mr. goodman went to prison. you were obviously concerned about it. >> i spoke to [inaudible] who told me about it. >> 2008, another two years, why did you not dismiss news of the world solbeck following the

moseley case? >> i never head him. >> despite the judge saying he was to blame for two of the women in involved. a judge made it clear he blackmailed two of the women in the case. >> i never heard of that. >> neither of you paid attention to the serious wrongdoing. >> i think my son can testify to that in more detail. >> i'll come your son in a minute. despite the fact that blackmail can result in a 40-year prison sentence, nobody in your u.k. company brought this to your attention. >> the blackmail, no. >> do you think that might be because they thought you wouldn't think a thing of it? >> no. i can't answer. i don't know. >> do you agree with the justice

when he said the lack of action discloses a remarkable state of affairs at news international? >> no. >> a judge find a chief reporter guilty of blackmail. it was widely reported. he said it was a remarkable -- >> why didn't he [inaudible] >> it was a civil case. were you aware the news international investigation emails [inaudible] are you aware that news international committed an investigation into news international emails by the solicitor's firm harper and lewis? >> yes. i was told of it happening. >> you claimed in the "wall street journal" that harper and lewis made a major mistake. what mistake are you referring

to? >> it was certainly -- we examined that. we found thing which we immediately went to counsel with to get advice on how to present it to the police. >> in their written response to this committee's questions are you aware they stated daniel cloge reviewed the emails. >> no. >> nobody in the company told you two of your executives reviewed the emails? >> i was under the understanding everything had been sent to them. >> you are aware he received the

emails on behalf of news international, are you not? >> yes. >> you are aware he stated he find evidence -- >> news corporation [inaudible] >> you aware he stated he found evidence of indirect hacking and breaches of national security and evidence of serious crime in the file. >> he did indeed. >> i can address these in some detail if you would allow me. >> i will get to you but it's your taught who is responsible but i'll come back to you. who was aware of harper and lewis finding at news international. >> we went to the senior officials of news corp. certainly the chief executive

officer. >> some crime? >> no. they were not the top legal officers. >> who were the top legal officers? >> mr. john chapman was the top legal officer and mr. crowe was the head of legal affairs. >> were you informed of that by your son or rebekah brooks? >> i forget. but by expect it was my son. i was in daily contact with them both. >> when were you informed about the payments made to gordon taylor and mike clifford? >> no.

>> you never informed the chief executives of the payment i want you to tell me whether you informed your father you authorized payments to gordon taylor as a result of him being a victim of a crime. >> the settlement with mr. taylor i'm happy to address the matter plaintiff taylor in some detail if you would like. my father became aware after the settlement was made in 2009, i believe, after the confidential settlement had become public as a newspaper reported on ought out-of-court settlement afterwards. the settlement in a civil claim that nature is something that normally in a company our size the responsible executives in the territory of the country would be authorized to make.

that's the way the company is functioned and it's below the approval threshold, if you will, that would have to go to my father as chairman and chief executive of the global company. >> there are other colleagues who will asking specific questions about this issue. mr. murdoch. at what point did you find out that criminality was indemmic in "news of the world." >> indemic is awide-ranging word. careful not prejudice the cause of justice which is taking place now. that has been disclosed and i became aware as it became

apparent, the -- i was absolutely shocked, appalled, and a shamed when i heard about the milly dowler case. >> did you read the last report into the matter where we referred to the collective amnesia of your executives who gave evidence to our committee? >> i haven't heard that. never made that particular... >> parliamentary inquiry, the senior executives in the u.k., guilty of collective amnesia, and, nobody brought it to your attention? i don't see why you are... believe that is not very serious. >> but, you are really not saying amnesia. you are really saying "lie." >> well, we found your executives guilty of collective

amnesia. i would have thought someone would like to bring that to your attention. that it would concern you. did they forget? >> no. >> okay, what has been obvious to most of the -- from the summer of 2009, phone hacking was widespread, you knew, for sure, in january of this year that the one rogue reporter line was false, is that right? sn>> i forgot the dates. >> why was edmondson the only one to leave news of the world, last january? >> we have given all our files and all our knowledge and everything, to the police. they have not given us the diaries so we don't know what

was in there, and, that there was a page which appeared -- appeared, to be addressed to him. and, again... >> perhaps it would be helpful to the committee if you would like to go around the particular detail, why decisions were made by the management team at news international, and the precise chronology would be more helpful perhaps if i could answer those questions, as the chief executive of the regional businesses across europe, i have somewhat more proximity to it. >> the detail points -- >> i'm simply wanting to clarify. >>... responsible for corporate governance and serious wrongdoing has been brought about with the company and, what he doesn't know, and what executives chose not to tell him, and with respect to you i will pursue my line of questioning and come back to you, later. why was no one fired in april,

when news international finally admitted that news of the world had been engaged in criminal interception of voice mail? >> it is not my job to... it was up to the police to bring the charges and carry out their investigation, which we were 100% cooperating with. >> but, in april, the company admitted liability for phone hacking. and nobody took responsibility for it then. no one was fired, the company admitted there they had been involved in criminal wrongdoing and no one was fired. why was that? >> there were people in the company, which apparently were guilty, and we had to deal with them appropriately. >>. >> if i can clarify most of the individuals involved or implicated in the allegations

that were there, left the company and some still were there, one, you mentioned, exited the business as soon as evidence of wrongdoing was found, and, a process was set up, in cooperation with the police, with any of those things they wanted to do. but, many of the individuals that were potentially implicated in those civil litigations and potentially in the criminal matters, had already left the building, and, were not in the news of the world at this time, and, current news of the world, our news of the world executives and journalists, at the time, many whom were not there, in 2006, and 2007 and so, it was -- some of them had already left. >> thank you. mr. murdoch, why did you decide to risk the jobs of 200 people before pointing the finger at those responsible for running the company at the time of the illegality. >> when a company closes down it

is natural for people to lose their jobs. we have, in this case -- we have continued with every effort to see those people are employed in other divisions of the company. if they are not part of the small group, or i don't know how big the group, coming out of it. >> did you close it because of the criminality? >> hm? >> did you close the paper down because of the criminality? >> yes, we felt ashamed at what had happened, and decided to bring it to a close. >> people lied to you and lied to their readers. >> we had broken our trust with our readers and the important point was, we had broken the trust with our readers? are you aware there were other forms of illicit surveillance used by private investigators, used by news international?

>> other forms of... >> illicit surveillance. computer hacking. i mean, i think all news organizations have used private detectives and do so in their investigations from time-to-time. i don't think illegally. >> if it can be shown to you the private investigators working for newspapers and news international, used forms of illicit surveillance like computer hacking, would you immediately introduce another investigation? >> that would be up to the police but we'd certainly work with the police if they wanted to investigate, we'd do it. if they wanted to do it. they would do it. >> let me ask you, when did you first meet mr. alex mariczek. >> i don't believe... >> he worked for the company 25 years. >> i don't remember meeting him and i may have shaken hands with him, but i have no memory.

>> okay. thank you. >> again, did i ask -- i have a number of short questions for you. why did you enter the back door at number 10 when you... >> because i was asked to. >> you were asked to, the back door of number 10? >> yes. >> why would that be. >> to avoid photographers in the front, i imagine. i don't know, i was asked and i did what i was told. >> the heads of state managed -- heads of state manage to go in the front door. >> yes. >> and you managed to go in the back door. >> yes. >> the choice of the prime minister or, their staff, whoever it is. >> so it was under the prime minister's direct instructions that you came in the back door?

>> i was asked would i please come in through the back door. >> i don't think my father had any direct knowledge of the arrangements made for is entry or exit from a particular building. >> again, have you ever employed any people which -- >> downing street, are you talking about... >> following the last general election. >> i was invited within days to have a cup of tea, to be thanked for all of the support of mr. cameron, no other conversations took place. it lasted minutes. >> that is the one you went through the back door. >> yes, i had been asked by mr. brown, many times... >> through the back door? >> yes. bill: can i ask you -- >> and my family went there, many times. >> were there any

pre-conditions, with the u.k. government, the support of your newspapers? >> i never guaranteed anyone support of my newspapers. we changed -- we had been supporting the thatcher government and, the government that followed, and we we changed and supported the labor party, when it was, ten years ago, with the direct loss of 200,000 circulation. >> did you ever employ any pre-conditions on either the labor party -- >> no. >> no pre-conditions whatsoever. >> the only conversations i have had with them, mr. blair, as i can remember, were arguing about the euro. >> well, mr. blair... >> what? >> mr. blair... halfway around the world in the 1997 election

-- that doesn't matter. >> that is something mr. cameron arranged. >> yes. >> also, i ask you, it is understood the fbi are investigating 9/11 victims. have you commissioned an investigation into these allegations? >> we have seen no evidence of that at all, and as far as we know, the fbi haven't, either. if they do, we will treat it exactly the same way, as we treated here, and, i cannot believe it happened to anyone in america, whether someone at news of the world, or... i don't know. certainly unnecessary, since everybody -- >> i'll come back to that in a moment. i want to clarify, if these allegations are in any way true, will you commission an investigation into them? >> absolutely. >> also, you must be

qualified... the fact that the scandal cost you the bskyb transaction and led to the closure of news of the world. who do you blame for that? >> a lot of people at different -- had different agendas i think in trying to build this hysteria. the competitors in the country, formally announced the consortium to try and stop us. and, they can you tell us with dirty hands and took us... >> so the competitor that stopped you -- >> no, i think it is a move was made. impractical to go ahead. >> we have been very clear that serious allegations of wrongdoing have been leveled about the news of the world and we believe that the news of the world, the actions of some reporters and people some years

ago, have fundamentally tarnished the trust of the news -- the news of the world had with its readers and this is a matter of huge and sincere regret. mine, my father's and the company's. the company's priority very much so is to restore that trust, is to operate in the right way and to make sure that the company can be the company that it always aspired to be and the removal of the offer to make a proposed -- the proposal to make an offer, to the bskyb shareholders, who are not news corporation, is simply a reflection of that priority of moving forward. >> well, i have sympathy with what you are feeling, but do you understand people who have been the victims of the news of the world allegations, feel that --

>> it is our absolute priority, to -- what happened at the news of the world was wrong. we and i have apologized profuse lie and unreservedly for that and my father has, as well. these are very, very serious matters. and, we are trying to establish the facts of any new allegations as they come up. we are working closely with the police to find out who -- you know, where the wrongdoing was and to hold people accountable. and, i think, importantly, as well, to the victims of illegal voice mail interceptions, not just that we apologize but we have admitted liability, the company admitted liability and we have set out the appropriate third-party compensation schemes to do that. >> all of these -- these are all matters that we are fully engaged in. >> i want to talk to your father.

mr. murdoch, do you accept, that, ultimately you are responsible for the whole fiasco. >> no. >> you are not responsible? >> the people i trusted to run it and then, maybe the people they trusted. i work with mr. hinton 52 years and i would trust him with my life. >> are you friday that the cash payments made by the news corporation companies to inform... registered with the appropriate tax authorities? >> i don't know anything about that. >> people were giving money -- if people were given money, in order to... >> people were given money. >> in order to get stories? was that -- do you know, did you notify the appropriate tax

authorities. >> all of our financial affairs as a public company are transparent. are audited. the tax jurisdictions of the company works in all around the world, or worked with, transparentlily and thoroughly. tax compliance is an important priority for any business, and, we comply -- and this company complies with the laws. >> would that also include people who were on regular monthly retainers, registered with the hmrc? >> i cannot -- i have no knowledge of separate people on retainers of the company and their own tax affairs or arrangements. i can speak for the companies. tax arrangements, to the best of my knowledge, we are a company that takes tax compliance, regulatory compliance, financial and regulatory transparency, hugely seriously. and, it is something that we are proud of. >> these questions are...

>> you are aware of the situation with the person who is currently in prison, whether they inadvertently misled the jury, your company has not disclosed internal e-mails that may have been appealed... >> i don't have any direct knowledge of that, mr. sheridan, i apologize but if you have additional questions on that, in the future, i am happy to supply written answers, but i don't have direct knowledge and i'm not in a position to answer those questions. >> a couple more questions. james, could you please confirm or deny whether any news corporation company is the subject of an investigation? >> i have no knowledge of that. i have no knowledge of that at this point. >> and, whether any news corporation company is the subject of an investigation by

the financial services... >> i don't believe so. not to my knowledge. >> and please confirm or deny, finally, whether any news corporation company is the subject of an investigation by hmrc? >> not to my knowledge, we have ongoing dialogue with the hmrc anniversary subsidiaries but as far as investigations are concerned, i have no knowledge of one. >> thank you. >> thank you, mr. murdoch, did you make the recommendation to the board of news corp. >> did i... >> make the recommendation, to close down the news of the world, the decision made by news corp.? >> it was the result of a discussion between my son and i. and senior executives. and ms. brooks, one morning, who called the board of news corporation, the whole board, to seek their agreement. >> you have already suggested it is because you felt ashamed.

there is not a suggestion it was a commercial decision to decide to close the news of the world. >> that's correct. >> and moving onto the financial government arrangements with news corp., you suggested earlier that the payments to mr. taylor were not at the news corp. level because of the finance threshold. could you tell us more about that? i understand, you have to agree to the payments, mr. taylor, could you tell us a bit more, was that a financial level, a managerial decision? >> it was, i'm happy to discuss and, thank you, a good question. i am very happy to discuss the matter of mr. taylor. the out-of-court settlement with mr. taylor was related to a voice mail interception that had occurred previously, and was actually one of the counts, as i understand it, of the 2007 trial, and it is important to

think back to 200 to understand what we knew then, what i knew then and the information in the context and so, the underlying interception was not a disputed fact. secondly, it was the advice and further to that, i should say, the advice and, the clear view of the company, that if litigated the company would lose the case, almost certain to lose the case because the underlying fact was not in dispute. thirdly, the company sought distinguished outside counsel to understand, if the case were litigated and if it were to be lost, which was the great likelihood, what the financial quantum would be or what it would cost, cost the company and it was advised with expenses, legal expenses and damages, that that could be between $500,000 and a million pounds, or thereabouts, i don't recall the exact number of the advice i think it was -- 250,000, plus expenses, plus litigation costs,

something like that. and, lastly, this is in the context in the first half of 2008 and this is my first real involvement with any of these issues and there was no reason at the time to believe that the issue of the voice mail interceptions was anything but a settled matter, and, that it was in the past, after the successful prosecution of the two individuals we discussed as well as the resignation of the editor. so, the settlement, the out of court settlement was made in that context and it was within the authorities as i understand it -- as i understood it, of news international, to be able to make those out of court settlements in due course, without going to the global level company. i at the time was the regional head for europe and asia of news corporation and i directed that

it was all right to settle that, but did not get involved in any of the negotiations directly about that settlement but i do, you know, recall in 2008 those are the things that were known. >> i would just add, my son had been with the company for a matter of a very few weeks. >> it was a few months, but, i had... i had come back to the company the ends of 2007, the middle of december and this was sometime, i don't recall the exact date but sometime the first half of 2008. >> coming back to the company, you what level of financial payments could news international... rebecca brooks, without you? >> generally speaking the way the company dhedz way the company will operate, and, as any company will operate, it was in certain financial parameters

or financial planning perspectives, we would look at a house of management and budget and say, how much money does a particular company or parts of the company or department have to have... to spend the money and at the end, she said they can... i don't have at the tip of my finger the precise financial authorities in that, but, you know, i can discuss after the committee hearing what exactly you would like to know and we can discuss whether or not it is right to, you know, come back to you with that. >> what level of financial payoffs would it have taken to require an authorization fellowship board of news corp.?

for the full board it is in the millions. >> do you know how much has been paid out to people, the board of executives. >> paid out in what way. >> paid out in settlement. >> settlement, legal settlements? i don't know the total. i don't know the total number, but around the world, it is customary, to reach out of court settlements in civil litigations and civil matters, and, it is something that rather than go through the lengthy and sometimes expensive litigation process with the risk that that often entails, it is customary to try to reach out of court settlements, in many cases. >> with news corporation, with the members of the outside directors, they reviewed all of these things. >> thank you. how is it possible to make payments to people that are not

employees of news corp. and news corp. subsidiaries? >> i'm sorry. >> how is it possible to transfer cash or some other fund, tor remuneration to people who don't invoice you, or who are not employees of news corp. subsidiaries? >> i cannot -- i don't know the exact arrangement. i have never... i don't do that myself. but, i can tell you how that is done, but, sometimes, in certain instances, you know, it is appropriate for, journalists or managers in a certain environment, cash in some instances, but it is some mary for them to record those, on the expenses, cash expenses, as well as invoice expenses, should be looked at and recorded. >> things like you said petty cash could be... [inaudible]. at the moment you don't necessarily -- you just recall the journalists gave it...

>> and i don't have direct knowledge of all of those arrangements. >> i want to ask if the payments could be made to family members of those elected to have been there. but, is it possible other forms of remuneration can be used, by the company, travellers checks, vouchers, things that can be used for cash? >> i don't have knowledge of that. >> just looking from your corporate governance, page 2, page 4 of your own code, and, it talks about directors and employees and officers of news corporation, acting for the [inaudible] including consultants, agents and business clients, we have never actually... can you tell me a little bit, especially on the financial side, how you, as an organization, try and make that happen? >> how it works is, that each newspaper has an editor or a

manager. but, they have to approve the expense claims of every reporter. the reporter has no authority to pay on his own. >> and, the managing editor manages a lot of the expenses and budgets and, should do so in a -- and is directed to do so with propriety. >> do you require your executives to make annual statements, that they provide you with the... i used to work for a company and -- >> every, every employee, every colleague around the world, of news corporation, receives the code of conduct, a set of -- a pamphlet that has some detail in it but it is not too much and so people read it.

and, with respect to what ethical conduct is required. >> available to you... >> we'd be happy to make it available to you. it is ethical conduct and the law and breaking the rules and so on and everyone who becomes an employee is required to do that and our legal counsel internally, also, conducts workshops around the world with staff from mumbai to manchester. around those rules and that code of conduct and is something we try to communicate as crisply as we can to everyone in the business. >> finally, i appreciate the murdoch statement at the beginning. being in the media spotlight and, perhaps you have not appreciated the attention you have had, without wishing to suppress the investigative journalism, will it make you think again about how you approach your headlines and stories in the future, whether they are people on the hill, or celebrities or others.

would you think of what your headlines are saying? >> i think... (inaudible) i'm not aware of any transgressions. it is a matter of taste and it is a very difficult issue, we have, in this country, a wonderful variety of voices and naturally they are very competitive. and headlines, which occasionally take finanoffense, sorry. but it's not intentional. >> one of the lessons, if you will, from all of this, for us, is, that we do need to think, i think, a business as well as an industry, in the country, more forcefully, and more thought fully about our journalistic

ethics, about, what exactly the codes of conduct should be, not just for news international, our publishing subsidiary, but, also, to the industry as a whole and what sort of governance should be around the whole area, and, we welcomed last week, the prime minister's announcement of a judicial inquiry, to both journalistic ethics and also, relationships that i understand with the police and with politicians and things like that and i think that is a really good thing for the country and for all of the interested parties to engage with fully, and one of the specific actions we have taken to try to be as proactive as we can, around this, is we have actually set up some of what we call and management and standards committee, that is outside of the actual management of our publishing company. and, reports to the independent directors through the independent directors of our global public board. precisely, to look at this issue

around, first, the specific issues, how we cooperate with the investigations, how we deal with allegations of wrongdoing, and get to the bottom of it, but, also, i think, importantly, how we coordinate and cooperate and really proactively engage with those judicial inquiries and how we start to set a code of conduct and a code of ethics, that we think and it thinks is something that can both be a paragon for all of our newspapers, and all of the industry, and also something that really has teeth and can hold the company to account. and, independently shared, this management standards committee -- chaired the management standards committee and we think it will be a much better way to go in the future. and we'd like -- and we'd like -- over the next 6 months, and a year and years, to really be judged on the actions that the company takes to put that right and put that in place. >> thank you. >> i'd like to say, if i may,

that the take away from what we have been saying about our apologies or... [inaudible] but this country does great ly... with the competitive press can, therefore have a very transparent society and that is sometimes very inconvenient to people. and, i think we are better and stronger for it. >> before i bring it to my next... i have a question related to news of the world. is it your intention to launch a new sunday tabloid newspaper? >> no. there are no... >> we have made no decision on that. >> no decision on that. >> for the moment there are no plans to have a news international title coming out on sunday at the tabloid end of the market? >> no immediate plans for that. >> i mean, we have talked in the past about moving to the 7-day

newsroom and speculation, all of that... >> i think we leave all of those options open. that is not the company's priority now. you know, in the last week, it has come up in the company. but, you know, my father's direction and my direction is to say this is not the time to be worrying about that. the company has to move forward on all of these other actions and get to grips with the facts of these allegations an understand them as fully as we can. >> can i appeal, to the witnesses, and indeed to members to try to keep brief, because we still have a lot to get through. >> in your statement the 7th of july, 2011, to james murdoch, you said that the company paid out of court settlements approved by me. i did not have a complete

picture when i did so. what do you know now that you did not know then? >> essentially, the new information that emerged that is critical here, is the information that came out of the ongoing process of civil litigation in 2010 and at the end of 2010, the presentation of evidence which had not been in our possession previously, from this civil litigation, that widened the circle, definitively, or at least made it very apparent, that this was very likely, that the circle was wider than the two individuals, mr. goodman and mr. mulcar from previous testimony and if i can go back to my previous testimony with mr. taylor, the commercial

and legal rationale around the settlement was very very, clear, which was, the underlying facts were not in dispute, a known fact from a previous trial and the advice was very very, clear as to what sort of damages could be expected to be paid and it was quite clear and likely that if litigated, the company would lose the case and, in the context of none of the other information, this is a full year before some of the new allegations in the press arose, from afar, so there is no reason to believe that it was anything other than in the past, so, knowing then what i know now, would i still have directed to negotiate to settle that case? i would, actually. but i would have coupled it with the other actions that we have taken since the new evidence emerged at the end of september, 2010.

and that is, to immediately go and look at whatever we could find internally around the individuals involved, to immediately contact the police about what they -- about information that may be of great interest to them, to put in place the process, which took a little while, i think in the early part of 2011, around admitting liability to the civil litigants and putting a process in place to get to the bottom of what legitimate allegations there were, apologizing unreservedly to the victims of those illegal voice mail intercepts, which were absolutely inexcusable. and having a system of compensation there. so, i think if i knew then what we know now and, the benefit of hindsight, we can look at all of these things, but if i knew then what we know now we would have taken more action around that. and, moved faster to get to the

bottom of these allegations. >> wiere the settlements paid b news corp. or news international. >> i think news group newspapers, i don't know -- i'm sure we can provide you with that information. >> what advice did... give you in relation to the payment to gordon taylor. >> advice from them as i have described it which was that we were... that the underlying fact in the case was a known -- a previous fact had come up in the trial of mr. mulcaire. >> were you involved it involved the criminal act of phone hacking. >> pardon me, sir. >> were you aware the case involved the criminal act of phone hacking. >> that was my understanding, that that was what the litigation was for damages for

the illegal voice mail interceptions. >> where did you get this advice in the first half of 2008. >> in 2009, they informed us they decided to settle mr. taylor's claim, based upon the advice received from the company's external legal advisors. was this advice received from... >> they have done work for us. i don't know precisely which external counsel they engaged on that but i can -- >> is the advice, from them or anyone else... >> no, the advice i had was oral from mr. miler and mr. crone. >> what verbal advice. >> as i described it. >> to settle. >> and, that outside legal advice had been taken with respect to the quantum of damages that were expected, and their advice was that the case would be lost and their advice was in the absence of any new

evidence, certainly, no new evidence was made aware to me and, the absence of evidence, it was simply a matter that was to do with events that had come to the light in 2007, in the criminal trial before and before i was there and this was a matter in the past. and the police as well, had closed their case and said there was no new evidence here that he had context of it was that it was about events that were a year or more old, the under like activity, prior to that and that was where we were. >> was part of the advice given, the high payment would ensure the matter would be kept confidential. >> no, not at all. the confidential nature of an out of court settlement is a normal thing. i don't know of many out of court settlements that are not kept confidential and there are some, i'm sure but there was nothing about confidentiality. i think i understand where are going with this, but, no, the amount paid and the advice there was on -- resting on advice from

outside counsel, with respect to the amount we'd be expected to pay in damages plus expenses and litigation costs. >> did you question why such high payments were made to mr. clifford, suggested to be 700,000 pounds and a million respectively, for invasion of preve privacy when the record amount for that, in a court remains 50,000 pounds, ironically, with the news of the world. >> i did question the amount but not in relation to the 60,000, if you recall, as i'm sure you do, the chronology here, the settlement made with respect to the 60,000 pounds against the news of the world which i believe was the mosely case, was after the authorization of the settlement and after the advice we sought from senior distinguished outside counsel.

with respect to the quantum of damages which would be expected to pay which in damages terms was a quarter of a million pounds plus expenses and litigation costs, was expected to be 500,000 and a million, is my recollection of it and i think that chronology is important. i think afterwards, you would obviously have different information but it wasn't afterwards, it was before. >> you have since said that when you approved the taylor settlement you did not actually have all the facts. what do you know now that you did not know then? >> as i have testified, mr. sanders, and, respectfully, mr. chairman, the key facts, key evidence that came to light at the end of 2010, as the lengthy due process of the civil litigations involving these matters, took their course, it was those -- that process that unearthed the key evidence there. and, it was really only after that, even, that the police, that any... they said we should

restart the information and, as soon as we had the information the end of 2010, which indicated there was a wider involvement, we acted on it immediately. >> tom crone said he did not know why he left news group newspapers. can you clarify why he was asked to leave after 26 years of service? >> well, last week the news of the world... two weeks ago, the news of the world published that paper, mr. crone was involved with the news of the world matters over the years, but the company believed and, the management of the company believed that it was time to part ways and i was not involved in those direct conversations and i cannot comment on the nature or content. i don't have knowledge of them. >> final couple of questions. the newspaper carried the story last week that news international subsidized andy coulson's wages after he left your employ. can you shed any light on that? >> i have no knowledge of andy

coulson's agwages after he left the company's employment. >> and, finally, are you familiar with the term "willful blindness"? >> mr. sanders, do you care to elaborate? >> it is a term that came up in the enron scandal, the willful blindness is a legal term and states if there is knowledge that you could have had, and should have had, but chose not to have, you are also responsible. >> mr. sanders, do you have a question? i don't know what you would like me to say. >> i'm not aware of that particular phrase. >> now you are... >> because i have explained it to you. >> thank you. >> i have heard the phrase before and we were not ever guilty of that. >> thank you. >> as you are... acknowledge

that when we had or inquiry in 2009 the evidence given by news international executives was rather hopeless, really, they came with a game plan and their game plan was to tell us that they didn't know anything and couldn't remember anything, and, they didn't know anybody who would know anything. and, i just wonder, so we can get off on a reasonable footing, what sort of coaching you have had today and who advised you how to handle this and what their advice was. >> with respect to today, after scheduling this disappearance, we took some advice around what the context of this sort of a setting is. it is me first time and my father's, i think first time in a committee meeting like this. mostly logistics and what sort of precedent, you have but we

were advised fundamentally to tell the truth. and to come and be as open and transparent as possible, and that is why and my father's intent, and intention, and, we hope that we can show you that that is what is happening. >> mr. murdoch, sr., you in answering questions from mr. watson, seemed to indicate that you had a rather hands-off approach to your company, that i think the point you made was that news of the world was less than 1% of your entire worldwide business and so you wouldn't really be expected to know the ins and outs of what was going on. could you just give us an illustration of how many times, how often you would speak to the editor of your newspapers, how often you speak to the editor "the sun" for example and, how often the editors of "the news of the world"? >> sometimes i would talk to the

news of the world... [inaudible] just to keep in touch and the sunday times, nearly every saturday. not to influence what he has to say, at all. i'm very careful not to premise any remark i make, or any inquiry, and, i'm not really in touch. i indicated i have been... an editor i spend most time is, the editor of the "wall street journal." but to say we are hands off is wrong. i work a ten or 12 hour day and, i handle a multitude of issues, that i have to handle, every day. news of the world, perhaps, i

lost sight of. maybe because it was so small in the general frame of my company, but, there were a lot of other things. >> i understand that. if i can help you out here. if somebody told me that you would speak to someone at the sun, at least daily and maybe twice a day, would you recognize that description or would that be... >> no. >> you wouldn't -- historically, traditionally have spoken to the editor of "the sun" that number of times? >> no. i'd like to, but, no. >> so, when you speak to the editor of the news of the world, on a saturday night, before publication, not to influence what they have to say, i absolutely understand that. so, i just am intrigued as to how these conversations go, because, i would have imagined it would go along the lines of, the editor of the news of the world, anything to report? you know, anything interesting going on?

and, the editor... you know, pay gordon taylor 600,000 pounds... surely -- surely in your weekly conversations with the editor of the news of the world, something as big as that, paying somebody a million pounds, paying somebody 700,000 pounds, surely, you would have expected the editor of the news of the world to drop it into the conversation at some point during your weekly chat, and you wouldn't have expected them to say that? >> no. i... i would call them once a month, i guess. >> if things like that weren't on the agenda, what was on the agenda? sorry? >> i say, what's doing. >> and, it wasn't -- >>... a story exposing x or y or he'd say, actually, nothing special.

>> james, would you -- >> owe might refer to the fact that there are how many extra pages, devoted to football that week. >> but wouldn't tell you of a half million pound pay off, interesting to somebody like me. >> [inaudible]. >> james, would you acknowledge in your view you overpaid them? >> i can't speak to the arrangements with mr. clifford as i was not... i don't have direct knowledge, because i haven't involved in those pieces, in that piece. with respect to the taylor piece, i made a judgment given the advice of counsel, given the advice of the executives involved that -- and going back and looking at what we knew in 2008 and looking at that advice, remembering that advice, and

looking at the context at the time, as we step back those few years, three years, now, you know, it was a decision that, given that context, was a decision that i still stand by, i think. >> it just seems interesting -- >> certainly -- sorry. >> you had a... >> apparently there was a contract with mr. clifford. which was cancelled my mr. coulson. >> i don't know about that. if you have knowledge of that... >> i'm sorry. >> well, it seems to me that... >> i don't know what was in the contract. >> we might want to -- go back to that. we might come back -- actually have to come back and talk about that. but it seems odd to me as a layman, that, you know, the 600,000, a million pounds... he had his phone hacked and heenl

got 600,000, 500,000, or even 50,000, he got 20,000 and it seems bizarre that somebody can have their phone hacked and get 20,000, and somebody else gets their phone hacked and get $600,000, or a million. and, surely, you can see that the difference most people draw is that one was when was all in open and everybody knew about these things and the other was paid when it was all trying to be kept rather quiet, 600,000. do you not see to most people looking at that, it sort of smells a bit? >> i understand. i understand where you are coming from and i understand how, these are big sums of money we are talking about, 100,000, 200,000, 600,000. this is... that is a lot of money and you look at that and say why would a company do that? and i would go back to my answer to mr. sander's question, which was just to be precise about the chronology here. really -- and i'm not a

lawyermentlawyer. i apologize -- >> but i -- >> i would like to answer the question. my understanding is the 60,000 settlement in the judgment in the moseley case, which was after the advice given around the gordon taylor settlement, is an important chronology, right? and that has now -- that information -- and court an judges have set a different, you know, different standard here. what we knew and what i knew at the time was that we had senior distinguished outside counsel who we had gone to to say if the case is litigated and if we were to lose the case, the company were to lose the case, what sort of damages would we expect to pay? and, we... the company received an answer, that was substantial. >> the answer is 250,000. >> that is what we -- >> mr. davies, it is important to be clear, mr. davies, i apology, but it is important to

be clear, the 600,000, 700,000 included damages, legal fees, and an estimation of what it would have cost otherwise, because the other side of the negotiations -- it is damages, plus costs, that gets you to that number. it is important -- respectfully, it is important to be clear about that. because i agree, they are big numbers. >> i was going to say on the payments you made to your staff, as it happens, going back to the trial of glenn mulcaire and clive goodman, clive goodman was pleading guilty to a criminal offense. did news international pay clive goodman's legal fees for his trial? >> i do want to be clear the chronology, first of all, i did not have firsthand knowledge of that... those times. remember, my involvement in these matters started in 2008 and in 2007, i believe, december, i was wholly focused

in my role as chief executive of a public company and i wasn't involved in those things. >> who would know? >> but i can try to answer the first question, first. to say that it is customary in certain instances with employees, or with others in the litigation, to pay some set of legal expenses, on behalf of of those to try to bring all of the evidence to a court, and so on, and that has all been done in accordance with... since any involvement that i have had any knowledge, is in accordance with legal advice about what the proper way to do things was, but i cannot speak to the 2007 arrangements. i don't have first hand knowledge of that. >> clive goodman employed the service of a qc, john kelsey frey, and he's a lawyer that news international use sns

probably one of the most eminent lawyers in the country and certainly one of the most expensive lawyers in the country and the go-to lawyer for celebrities, and, it seems odd to me a journalist on the news of the world who is pleading guilty here to a crime uses in mitigation probably the most expensive lawyer in the country, which, obviously, leads most people to suspect that his legal fees were not being paid for by himself but were being paid for by news international. now, given that he was pleading guilty to a criminal act, phone hacking, which presumably leads to summary dismissal, gross misconduct, why on earth would news international even think about, dream about paying the legal fees of somebody who was engaged in criminal activity? and, committed something that was clearly gross misconduct? >> i don't have any direct knowledge of the specific

arrangements with mr. goodman in 2007, so i cannot answer the specifics of that question. but i can say that, because i have asked the question as well, more recently than that. with respects to who the company pays, and what contributions to legal fees do we make, does the company make and so on and so forth, and i can tell you that, you know, in asking the question, i have been surprised -- and this is legal counsel, telling me this, that it is customary in here to sometimes make contributions to the legal costs of either co-defendants or defendants in related matters and, so on and so forth and i have no direct knowledge of that instance that you mentioned and if you have any additional specific questions, about that, perhaps, mr. chairman, we can follow up with you on that. and i'm happy to do that. >> it is all well and -- these

issues go back sometime and i'm surprised you have not followed up on them already. were any payments made subsequently to clive goodman after the conviction? did news international make any payments at all, to those two people following their convictions? >> i'd like to answer that question and it is a good question and it is a specific question. the -- to my knowledge, there were allegations made, legal fees had been paid, after those -- that time in 2007 to those i think asked the question myself and i was very surprised to find the company had made certain contributions to legal settlements, and i don't have all of the details around each of those, not legal settlement, sorry, legal fees, around there, and i just, you know, and i was surprised. i was very surprised to find out that that had occurred. they were done as i understand it, in accordance with legal counsel and, the strong advice to...

>> who signed off -- who at news international agreed to -- who signed the checks? who agreed to pay -- make those payments. >> i do not know who signed off -- >> you know -- i mean, you talked about the managing editor, would you expect the managing editor -- >> it would have been the management of the legal cases, i would think but i think we have to -- you know, i'm happy to go back and do that but it was not something to came to my attention, first of all. >> i would like to say... [inaudible] anything to do with the managing editors. >> it wouldn't? would it have been above or below the managing editor. >> it would be above. >> this would have been on legal advice, payments had a hand in litigations, and i... again, i don't have direct knowledge, details of the current status of those but i can until, i was as surprised as you are, to find that some of those arrangements had been made. >> mr. murdoch, sr. i seem to be

getting further with you, for which i'm grateful. would it have been mr. hinson? would he have agreed. >> it could have been. >> it could have been? would have been or could have been. >> could have been. >> who else could have been. >> chief legal officer. >> and, with that... >> sinot signing checks. approval. signing checks... it would be on the instructions of the chief legal officer. >> you said that you were involved in the decision to get rid of tom crone. whose decision was that. >> the management of the company at the time. recently, chief executive, mrs. brooks. >> and... >> chief executive of the company and senior level personnel decisions are made by them. >> when he left the company, he left the day or the day after

allegations were made in the guardian, originally, about phone hacking. was that link, dae resign? what happened... how did he leave the company? >> that, i don't know. that would have been for -- at the time, news of the world matter for them. >>... you need ask him. >> why did mr. hinson resign? >> he resigned sadly, last friday, rebekah brooks... [inaudible] and said, i was in charge of the company, during this period, we're under criticism for, and, i feel i must step down.

>> either rebekah brooks... >> did they ask to leave. >> they both asked to leave. >> why did you not accept rebekah brooks' resignation when she first offered it. >> because i believed her and i trusted her and i do trust her. >> why did you accept it this second time around? >> in the event she insisted. she was at a point of extreme anguish. >> can you tell us how much all of these characters have been paid off? how much they have been given in a financial settlement on their departure from news international? >> no, i can't tell you. but, in the case of mr. hinton, it was... [inaudible] for his continuous service. >> 10 million? 5 million? 10 million? >> pounds? >> strictly confidential. >> and is there anything, any